Access, Quality, And Financial Performance Of Rural Hospitals Following Health System Affiliation

Published in: Health Affairs 38, No. 12 (December 2019), Pages 2095-2104. doi: 10.1377/hlthaff.2019.00918

Posted on RAND.org on January 28, 2020

by Claire E. O'Hanlon, Ashley M. Kranz, Maria DeYoreo, Ammarah Mahmud, Cheryl L. Damberg, Justin W. Timbie

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More than 100 rural hospitals have closed since 2010. Some rural hospitals have affiliated with health systems to improve their financial performance and potentially avoid closure, but the effects of affiliation on rural hospitals and their patients are unclear. To examine the relationship between affiliation and performance, we compared rural hospitals that affiliated with a health system in the period 2008–17 and a propensity score–weighted set of nonaffiliating rural hospitals on twelve measures of structure, utilization, financial performance, and quality. Following health system affiliation, rural hospitals experienced a significant reduction in on-site diagnostic imaging technologies, the availability of obstetric and primary care services, and outpatient nonemergency visits, as well as a significant increase in operating margins (by 1.6–3.6 percentage points from a baseline of –1.6 percent). Changes in patient experience scores, readmissions, and emergency department visits were similar for affiliating and nonaffiliating hospitals. While joining health systems may improve rural hospitals' financial performance, affiliation may reduce access to services for patients in rural areas.

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